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For a brief second yesterday stocks were starting to look good.? It was better than a second, it was more like most of the morning into early afternoon then the sadness came.? Sadness came to TWTR on Tuesday and there was a bit of a let up today.
Note that vol. across the term structure got savaged by the close.? IV in June traded into the 50 handle and near term IV was down 15 points.? What does that mean?? Most likely there will not be a parabolic bounce in the stock.
LivevolX (r)?www.livevol.com
The type of action yesterday was more call writing in nature where folks who have avoided TWTR jumped in and sold wads of calls against their new positions.? The upside options got hit pretty hard.? It also means the big sell off is probably over for now.
The trade
Broken wing PUT butterflies, starting with the downside still are not bad for 60% IV in the near Jun term.? Place the short strike around the IPO price and if TWTR catches a bounce let it go out worthless.